Since the beginning of this year, the investment market has performed gratifyingly. Gold rose from $1450 to $2000, an increase of 30%. Crude oil fell from $66 to negative price, and then rebounded to the current $45. Many celebrity stocks are even more eye-catching. The electric car leader-Tesla has risen by more than 333%, and Apple has risen by 56% this year.
Affected by Covid-19 epidemic this year, the number of online investors have repeatedly hit new highs. As an investment tool for ordinary people, CFD trading is favored by investors. According to statistics, the overall gold CFD trading volume rose by more than 10% in July, and the US stock CFD trading volume also increased significantly.
CFD trading refers to investing in asset price trends without owning the asset. Investors use the price of the product as the trading object and make profits from the rise and fall of prices. You can trade regardless of whether the market rises or falls.
CFD trading supports a variety of products such as foreign exchange, commodities, stocks, index, and crypto-currencies.
Let us take a closer look at several advantages of CFD trading.
- 1. CFD trading is leveraged transactions. For example, if the Facebook stock price is $300, you need to invest $30,000 to buy 100 shares. However, if you use CFD trading to buy the same worth $30,000, with a leverage of 1:100, you only need to invest $300. Leveraged investment can use small amounts of funds to purchase large assets and seize investment opportunities. This is why most investors choose CFD trading.
- 2. Two-way trading is the biggest advantage of CFD. When investors have a hunch that asset prices may fall in the near future, they can use short-selling in CFD trading, buy and close positions at low prices after the price drops. The bid-ask spread is the profit. On the contrary, it means to go long. When investors have a hunch that asset prices may rise in the near future, they buy assets and sell them at a high price after the price rises to close their positions.
As long as investors set the risk within a controllable range and grasp the market trend, they do not need to worry about the market direction, trade boldly and profit from it. To CFD trading is the best choice for ordinary investors to invest. CFD trading was first created in the 1970s, and it took less than 30 years to evolve from a tool for large institutions to effectively avoid securities risks to an ordinary investment tool for global retail investors. With the recent violent fluctuations in the prices of major assets, CFD trading has been favored by more and more investors and has become one of the main trading methods for investing and amplifying profits.